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El Paso Children's Museum: What you need to know on the now $60 million project

The proposed El Paso Children's Museum received a $20 million boost from the city to ensure it offers a "world-class" educational experience, but at least one city representative believes even that won't be enough.

The $20 million the city voted to issue in debt through certificate of obligation bonds combined with about $20 million in additional funding from a nonprofit partner, EPC Museum, boosts the total project budget to about $60 million.

Voters approved $19.5 million in funding for the Children's Museum in 2012, as part of a $473 million quality of life bond package. The Children's Museum was one of three "signature" projects. The other two were a multipurpose arena and a Hispanic Cultural Center.

Officials said the city’s contractual agreement with the nonprofit will cap what the city spends on the construction and development of the project at the $40 million made up of the voter-approved quality of life bond funding and the nonvoter-approved certificate of obligation funding. That agreement was finalized Monday, July 23.

City Council approved funding 6-to-1

The City Council voted six to one to use of certificates of obligation for the additional funding. City Rep. Michiel Noe voted against it. City Rep. Cassandra Hernandez was not at the meeting.

Noe said that even though he had supported the proposed Children’s Museum, he is certain costs will continue to rise.

"Things just go through the roof on lots of projects and other projects get funding cut and that’s where I’m like, I’m out. I'm not supporting it," Noe said. "I don’t agree with how they are being done."

Noe feels other quality of life bond project are equally important but are not receiving the same amount of attention as the Children’s Museum.

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Check out renderings of the proposed El Paso Children's Museum and photos of the site as it sits now.
El Paso Times

Many bond projects underfunded

Mayor Dee Margo acknowledged that several of the projects approved in 2012 were underfunded, including the West Side natatorium that opened in April.

Originally, the quality of life bond allocated $8 million for the pool, but the cost and scope of the project grew after the community asked for amenities that would make it state-of-the-art and better able to accommodate tournaments.

In 2014, the price tag rose to about $13.6 million. The city eventually paid $15.5 million.

Margo said the city’s costs for Children’s Museum will not go above the agreed-upon $40 million, and he added that the city will only issue debt as it is necessary.

Property taxes to increase

Chief Financial Officer Robert Cortinas said the $20 million in certificates of obligation would increase property taxes by an additional $3 per year on a $100,000 home. That increase would not occur until 2021, he said.

"We’re capped; we are not doing any more than what we have agreed," Margo said. "It’s a chance to have a world-class children’s museum to bring a benefit to this community that we do not have yet. It's like taking the old Insights (children's museum) and magnifying it by 1,000 times and it's just positive. It's very positive."

The agreement stipulates that any cost overruns for construction or design of the project will be covered by the nonprofit, but it also allows exceptions for city-requested and -approved changes.

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Architectural rendering done by the TEN Arquitectos firm based in Mexico City and New York City.(Photo: RUBEN R. RAMIREZ/EL PASO TIMES)

Changes to the plans for the kids museum

The original $19.5 million budgeted in 2012 was expected to pay for the construction of the facility and some of the exhibits. The city anticipated a 30,000- to 35,000-square-foot project that would have been larger than the 20,000-square-foot Insights Center and smaller than the El Paso Museum of History.

By 2016, the city had made no movement on the project, said Eric Pearson, president of the El Paso Community Foundation. The nonprofit foundation proposed a public-private partnership to raise $10 million to add to the $19.5 million project.

Those discussions resulted in a preliminary agreement and the establishment of the EPC Museum nonprofit.

Pearson said the community foundation had served as the fiscal sponsor to the EPC Museum group until it received its 501(c)3 nonprofit status. EPC Museum still receives accounting and administrative support from the community foundation.

EPC Museum has eight board members, including Pearson. The other board members are Niko Tejeda, CEO of the Hospitals of Providence Transmountain Campus; Sam Rodriguez, city engineer and director of the Capital Improvement Department; Tracey Jerome, director of the city Museums and Cultural Affairs Department; Miguel Fernandez, president and CEO of Transtelco Inc., a binational telecommunications company; Josh Hunt, executive vice president of Hunt Cos. which is a national real estate development and management group based in El Paso; John McKee, who serves on the board of the Down Syndrome Coalition for El Paso; and Cita Sanders, who has served on the Mexican Federation of Health and Community Development, or FEMAP board.

"At that time, we pledged a layer of excellence to the budget," Pearson said. "What we were looking at is what the city was putting in, and we wanted to match it for 50 cents on the dollar. But outside of that, we knew the ($19.5 million) number was not real. We felt it was not enough."

The community foundation hired Gyroscope Inc., an architecture, museum planning and exhibit design firm based in Oakland, Calif., which produced a master plan that determined a state-of-the-art world-class museum would cost about $60 million.

In December, EPC Museum said it would raise its share of the funding to $20 million if the city would also agree to add $20 million to reach the new estimate.

World-class offerings

Pearson said the master plan for the museum, which cost about $125,000 and was paid for by the community foundation, relied heavily on input from the community and educational institutions in the area.

"They wanted it to be world class, to have a science center and that it be an integral part of the museum," Pearson said. "If the city wanted a world-class space, this is what it was going to cost."

The new museum will be approximately 80,000 square feet and will house a variety of interactive displays and exhibits, as well as features such as child learning centers with interactive sound and wind tunnels and a 40-foot climbing wall.

The Children’s Museum will be built at 201 W. Main Drive. which was the former Greyhound Lines Inc. maintenance facility, near Southwest University Park. The city purchased it in January 2016 for about $1.4 million.

Preliminary architectural designs for the building included additional land adjacent to the site. The city attempted to buy three adjacent properties, but scrapped the effort after the property owners declined to sell.

Paul Kortenaar, who was hired by the EPC Museum nonprofit about a year ago to be the founding director of the Children's Museum, said that even though the city was unable to purchase the other properties for the museum, the public-private partnership will still deliver an 80,000-square-foot building.

"The building plans were conceptual," Kortenaar said. "We will still deliver the same size, and still deliver the exhibits" that were proposed.

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Architectural rendering done by the Snøhetta firm based in Oslo, Norway and New York City(Photo: RUBEN R. RAMIREZ/EL PASO TIMES)

Designed specifically for El Paso

Kortenaar added that the museum will be specifically designed for El Paso, down to the weather and to educational requirements.

"It's not going to be like any other Children's Museum in the country," Kortenaar said.

Kortenaar is confident the project will be delivered within a set time frame and within its new budget.

"If we spend more or overdesign, the city is not responsible; the contract will be held by us," Kortenaar said. "From Monday (when the agreement was signed), we are expecting approximately 43 months. It will take about three and a half years, which will take us through 2021. If the timing isn't perfect, then spring 2022."

Kortenaar said the EPC Museum nonprofit and the city will be protected from cost overruns through its contracting process, as well. The museum will be built under what is called a “construction manager-at-risk” contract. A construction manager is hired who then works with designers, builders and other companies to centralize responsibility for the project under a single contract at a guaranteed maximum cost and time frame.

"Any failure to meet the timeline or to meet the cost, they (contractors) are financially penalized," Kortenaar said. "So I can in fact say that the museum will be within the cost frame that that we described and will be delivered on time."

The agreement with the nonprofit establishes the responsibilities of each of the parties as the project is developed, constructed and operated.

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Eric Pearson, president and CEO of the El Paso Community Foundation talks about the upcoming children's museum.

According to the agreement, EPC Museum will raise $20 million over a 10-year period for the project. The nonprofit will develop and operate the museum once it is opened. The city will pay its $40 million, as well as funding for capital repairs and an annual stipend for salaries, operational expenses, exhibits and repairs.

Once the museum opens, the city will deposit $300,000 every year for a five-year term for capital repairs and facility improvements. After the sixth year, the nonprofit and city will split the costs for maintenance.

The stipend will equal 33 percent of the annual operating budget, which is estimated at about $2.5 million. The nonprofit will cover the difference.

At the other city museums in El Paso, the city pays 100 percent of operating costs.

Kortenaar said the preliminary budget is based on an estimated admission fee of about $5 and about 250,000 visitors per year. The visitor estimates are based on attendance at children's museums in cities of similar size to El Paso.

How the public-private partnership works

The city will own the site and lease it to the El Paso Children’s Museum Local Government Corp., which will then sublease it to the nonprofit. EPC Museum will pay $24,000 per year in rent. The rent payments will then be placed in an account that will be used for maintenance and repairs.

The El Paso Children’s Museum Local Government Corp. was established to act on behalf of the city regarding the development and construction of the Children’s Museum. The City Council will serve as its board for the corporation.

Local government corporations are separate and independent corporate entities that act on behalf of municipalities and are frequently established to manage public-private partnerships.

Southwest University Park similarities

The city created a similar entity for the Downtown ballpark. For that project, the city initially estimated the ballpark would cost $50 million. The city agreed to increase the budget to $64 million and MountainStar Sports Group, who partnered with the city for the development of the stadium and who leases Southwest University Park, also paid an additional $12 million.

The ballpark was also built using a construction manager at-risk contract and took just under 12 months to complete, El Paso Times archives show.

Kortenaar said the nonprofit is in the process of negotiating contracts for the construction manager-at-risk and architecture firm for the museum, and the groundbreaking is tentatively scheduled for spring of next year.